Article 3 of the Saudi Government Tenders and Procurement Law
المادة 3 من نظام المنافسات والمشتريات الحكومية · الفصل الثالث: المبادئ الأساسية
The article requires government entities to deal only with licensed persons, and, when dealing with foreigners inside the Kingdom, to first confirm that there is not more than one qualified local person.
Official text (Arabic)
This article has not been amended since the law was issued.
1- تتعامل الجهات الحكومية عند تنفيذ أعمالها وتأمين مشترياتها مع الأشخاص المرخص لهم بذلك، طبقاً للأنظمة والقواعد المتبعة.
2- على الجهة الحكومية عند تعاملها مع أشخاص أجانب لتأمين مشتريات أو تنفيذ أعمال داخل المملكة التأكد من عدم توافر أكثر من شخص محلي مؤهل لتأمين المشتريات أو تنفيذ الأعمال المطلوبة. وتحدد اللائحة الشروط والضوابط اللازمة لتطبيق حكم هذه الفقرة.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 3 explained in plain English
This article sets two basic rules for those with whom government entities deal:
First: dealing only with licensed persons. In carrying out works and securing procurement, government entities deal with persons licensed to do so, in accordance with the applicable laws and rules. Anyone who wishes to contract with a government entity needs to be licensed for the required activity under the applicable laws.
Second: the standard for dealing with foreign persons. If a government entity wants to deal with foreign persons to secure procurement or carry out works inside the Kingdom, it must first confirm that there is not more than one qualified local person to carry out those works or secure that procurement. That is, the existence of more than one qualified local person prevents resorting to the foreigner under this paragraph.
The article refers to the Implementing Regulations the setting of the conditions and controls needed to apply the rule on dealing with foreigners, so the article itself does not detail how to verify this or which documents are required.
This article is consistent with the objective of promoting economic development in Article 2, and with the principle of equality among those wishing to deal who meet the conditions in Article 4. The phrase "government entities" is understood according to its definition in Article 1. Foreign companies wishing to contract may consult a lawyer who specializes in government contracts and administrative disputes or in foreign investment.
Practical example
A government entity needs to install central air-conditioning systems for a building in Riyadh and has received interest from a foreign company. Before dealing with it, the entity must confirm that there is not more than one qualified local company to carry out the work; if it turns out that several qualified local companies exist, it may not, under this article, resort to the foreign company.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 3 of the Saudi Government Tenders and Procurement Law
Can a foreign company contract with a Saudi government entity?
It may, to carry out works or secure procurement inside the Kingdom, after the entity confirms that there is not more than one qualified local person; the Implementing Regulations set the conditions and controls.
Is a license required to deal with government entities?
Yes. Government entities deal with persons licensed to carry out the works or secure the procurement, in accordance with the applicable laws and rules.
Where do I find the controls for dealing with foreigners in government procurement?
The article refers the setting of the conditions and controls to the Implementing Regulations of the Law.
More articles on Qualifying Bidders and Dealing Conditions
- Article 18
The article requires those government entities deal with to meet the conditions needed to carry out works and secure procurement, and refers the details to the Implementing Regulations.
يجب أن تتوافر في الأشخاص الذين تتعامل معهم الجهات الحكومية الشروط اللازمة لتنفيذ الأعمال وتأمين المشتريات وفقاً لما توضحه اللائحة.
- Article 19
The article requires the government entity to carry out pre-qualification or post-qualification, and where pre-qualification is carried out, limits the invitation to the tender to those who passed it.
1- على الجهة الحكومية إجراء تأهيل مسبق أو لاحق في الأعمال والمشتريات وفقاً لما توضحه اللائحة. 2- في حال إجراء تأهيل مسبق، تقتصر الدعوة للمشاركة في المنافسة على
- Article 20
The article requires pre- or post-qualification criteria to be objective and measurable, relate to technical, financial and administrative capabilities and contractual commitments, and be proportionate to the project.
يجب أن تكون معايير التأهيل المسبق أو اللاحق موضوعية وقابلة للقياس ومتعلقة بالقدرات الفنية والمالية والإدارية ومقدار الالتزامات التعاقدية للمتنافسين، وبما يتناسب
- Article 27
The article allows bids submitted jointly to be accepted in government tenders, and refers the regulation of this to the Implementing Regulations.
يجوز قبول العروض بالتضامن وفقاً لما توضحه اللائحة.
- Article 90
The Article requires government entities to contract directly with those authorized to work and bars brokerage, and a distributor or agent approved by the original producer is not a broker.
يكون التعاقد مع المصرح لهم بالعمل مباشـرة، ولا تجوز الوساطة في التعاقد، ولا يُعد وسيطاً الموزّع أو الوكيل المعتمد من المنتج الأصلي.
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.